Keeping your community in good repair CCI – Golden Horseshoe Chapter Level 200 Course (Kitchener) October 25, 2008 Presented by Michael H. Clifton, MA, LLB, ACCI (Law) Partner, Clifton Kok LLP

3 Subjects in 1.5 hours n Repair and Maintenance Obligations n The Standard Unit Definition n Changes to the Common Elements

Repair & Maintenance n n Repair after Damage: Section 89(2) “The obligation to repair after damage includes the obligation to repair and replace after damage or failure…” n n Maintenance: Section 90(2) “The obligation to maintain includes the obligation to repair after wear and tear but does not include the obligation to repair after damage.” n n Repair after Damage: Section 89(2) “The obligation to repair after damage includes the obligation to repair and replace after damage or failure…” n n Maintenance: Section 90(2) “The obligation to maintain includes the obligation to repair after wear and tear but does not include the obligation to repair after damage.”

1.To repair the units after damage 2.To repair common elements after damage 3.To maintain the common elements 4.To do any repairs after damage for which a unit owner is responsible but fails to do in a reasonable time 1.To repair the units after damage 2.To repair common elements after damage 3.To maintain the common elements 4.To do any repairs after damage for which a unit owner is responsible but fails to do in a reasonable time Repair & Maintenance n Who bears which obligation? 1.To maintain the unit

Repair & Maintenance n What the declaration can change 1.To maintain the units or any part of them 1.To repair the unit after damage 2.To maintain the common elements or any part of them 3.To maintain and repair after damage “exclusive use” common elements 1.To repair the unit after damage 2.To maintain the common elements or any part of them 3.To maintain and repair after damage “exclusive use” common elements

1.Unit owner to repair non-exclusive use common elements after damage Repair & Maintenance n What the declaration cannot change

Standard Unit n What the standard unit is not 1.A description of unit boundaries 2.A change to the unit boundaries 3.Anything whatsoever, under any circumstances, regardless of anything that might be or appear to be written in your condominium documents, to do with the common elements 1.A description of unit boundaries 2.A change to the unit boundaries 3.Anything whatsoever, under any circumstances, regardless of anything that might be or appear to be written in your condominium documents, to do with the common elements

Standard Unit n What the standard unit is 1.A division of the unit components into “standard” items and “improvements”

Standard Unit n What the standard unit is for 1.It defines insurance obligations - The condominium corporation only insures the “standard” unit components. - The unit owner only insures the “improvements”. 1.It defines insurance obligations - The condominium corporation only insures the “standard” unit components. - The unit owner only insures the “improvements”. 2.It defines the scope of repair (after damage) obligations - whoever bears the obligation to repair the unit after damage, repairs the “standard” unit components. - The unit owner repairs the “improvements”. 2.It defines the scope of repair (after damage) obligations - whoever bears the obligation to repair the unit after damage, repairs the “standard” unit components. - The unit owner repairs the “improvements”.

Standard Unit n Sources of a Standard Unit Definition

Standard Unit n Sources of a Standard Unit Definition 1.Board considers and approves a draft definition. 2.Board proposes by resolution to make a by-law containing the definition. 3.Board calls a meeting of unit owners for the purpose of presenting (and hopefully passing the by-law). 1.Board considers and approves a draft definition. 2.Board proposes by resolution to make a by-law containing the definition. 3.Board calls a meeting of unit owners for the purpose of presenting (and hopefully passing the by-law). 4.A copy of the proposed by-law is included in the notice of meeting. 5.A motion is made to approve the by- law, and discussion follows until the meeting chair calls for a vote. 6.If the owners of a majority of the units vote in favour, the by-law is passed. 4.A copy of the proposed by-law is included in the notice of meeting. 5.A motion is made to approve the by- law, and discussion follows until the meeting chair calls for a vote. 6.If the owners of a majority of the units vote in favour, the by-law is passed. 7.The by-law becomes effective on the day it is registered on title to each of the units.

Standard Unit n What if there is no Standard Unit Definition? Everything in the unit is “standard”; there are no “improvements”

What to do when damage occurs… 1.Has the damage occurred to a part of the unit, or to a part of the common elements? 2.Did it occur to a part of the standard unit, or to an improvement? IMPROVEMENT The Unit owner is solely responsible for its repair The Unit owner is solely responsible to insure it STANDARD CHECK THE DECLARATION Condominium corporation remains solely responsible to insure it

What to do when damage occurs… Section 105 of the Act Basic Provision: If owner, or owner’s resident or guest, causes the damage to owner’s own unit, then owner must pay the up to the deductible amount on account of repairs insured by the corporation Basic Provision: If owner, or owner’s resident or guest, causes the damage to owner’s own unit, then owner must pay the up to the deductible amount on account of repairs insured by the corporation Extended by By-law: - owner’s responsibility for deductible amount extends to all damage to unit provided the condo corporation (its officers, employees, agents, etc.) do not cause the damage - add to common expenses Extended by By-law: - owner’s responsibility for deductible amount extends to all damage to unit provided the condo corporation (its officers, employees, agents, etc.) do not cause the damage - add to common expenses

What to do when damage occurs… 1.Has the damage occurred to a part of the unit, or to a part of the common elements? 2.Did it occur to a regular common element, or to an exclusive use common element? REGULAR Condominium corporation is solely responsible to insure it Condominium corporation is solely responsible to repair after damage EXCLUSIVE USE CHECK THE DECLARATION Condominium corporation remains solely responsible to insure it

Changes to the Common Elements n By the Corporation n By the Unit Owner

Changes to the Common Elements n By the Corporation 1.Upgrades necessary to complete repair or maintenance obligations 2.Changes that are required by law, for safety or have a minimal cost 3.“Substantial” changes 4.Something in-between 1.Upgrades necessary to complete repair or maintenance obligations 2.Changes that are required by law, for safety or have a minimal cost 3.“Substantial” changes 4.Something in-between

Changes to the Common Elements n By the Unit Owner 1.Unit owner asks board for permission to make the proposed change 2.Board reviews proposal at a meeting and, by resolution, approves it (or not) 1.Unit owner asks board for permission to make the proposed change 2.Board reviews proposal at a meeting and, by resolution, approves it (or not) 3.IF EXCLUSIVE USE COMMON ELEMENTS, Board assesses key points before approving: 1.No adverse effect on other units 2.No cost to the corporation 3.Will not detract from appearance of other units or buildings 4.If a structural change to any building, will not affect structural integrity, per engineer’s certificate 5.Will not contravene any other requirements prescribed by regulation. 5.Unit owner and corporation enter into an agreement, to be registered on title to the Unit, governing the repair, maintenance, insurance and ownership of the changed common element. 4.If the change is the type that, if made by the corporation, would require a notice to unit owners and/or a meeting and vote of approval, these conditions must also be met.

Considerations about Section 98 Agreements n Can be Prospective as well as Retrospective n Can include more than one unit n Can include more than one improvement (in fact, it can include all by including none) (in fact, it can include all by including none) n If prospective, should expressly not include permission for any change

Thank you Or is it time for our break already? Any questions?